Twitter, TikTok Have Had Preliminary Talks About Merger.

Twitter TikTok Microsoft Donald Trump’s China Jack Dorsey

Twitter Inc. has held early talks about a potential combination with TikTok, the Chinese-owned video-sharing app that the Trump administration has declared a national-security threat, Dow Jones reported, citing people familiar with the matter.

It’s unclear whether Twitter will pursue a deal, which would involve TikTok’s U.S. operations, the people said. Because Twitter is much smaller, the San Francisco-based social media company has reasoned it probably wouldn’t face the same level of antitrust scrutiny as Microsoft Corp. or other potential bidders, people familiar with the discussions told Dow Jones.

Microsoft has been negotiating for weeks with TikTok’s owner, Beijing-based ByteDance Ltd., and is considered the front-runner for any possible deal, according to the people. Microsoft CEO Satya Nadella spoke with President Donald Trump about the matter a week ago.

A TikTok spokesperson said the company doesn’t comment on “market rumors,” in response to a inquiry on Dow Jones’ report.

Twitter’s market capitalization is about $29 billion, smaller than Microsoft’s at more than $1.6 trillion. Twitter would almost certainly need help from other investors if it does buy TikTok, Dow Jones said, though it counts private-equity firm Silver Lake among its investors.

Jack Dorsey, the chief executive officer of Twitter, has had a failed attempt at short-form video: it shut down the Vine app in 2016, four years after acquiring it, as part of an effort to cut costs. The company has recently been under attack by President Trump, who said that Twitter and Facebook Inc. are unfairly censoring him. Both platforms blocked a video shared by accounts linked to Trump for violating their policies on coronavirus misinformation.

TikTok plans to file a federal lawsuit as soon as Tuesday to challenge President Trump’s executive order banning the video-sharing service from the U.S. as unconstitutional, National Public Radio reported earlier Saturday, citing an unnamed source. TikTok responded to the ban in a blog post on Friday, saying it was “shocked” and would pursue all remedies available.

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